But sometimes, the underdog is the better option, which is often true in the case of credit unions. Credit unions often offer lower fees, lower interest rates, better customer service and are accountable to their members compared to deep-pocket stockholders.
Credit unions also differ from banks in their eligibility requirements. Laws created by the Federal Credit Union Act of 1934 dictate credit unions must have defined memberships. For example, members must have a common bond such as the same place of worship, employer, geographic location or relationship to an existing member.
Credit Unions Aren't Exclusive Clubs
These eligibility requirements may feel exclusive, but shouldn't deter potential customers from applying for membership. In fact, there are at least 60 credit unions anyone can join, including ones that sound exclusive to the military or government employees, like Pentagon Federal Credit Union.
People interested in a joining a credit union should first see if a community-based credit union fits their needs. It's often easy to be eligible for membership by simply living, working or worshipping within the credit union's boundaries.